Fertility, Taxation and Family Policy*

Abstract

Historically, there is clear evidence of an inverse relationship between female labour supply and fertility. However, the relationship across countries is now positive. Countries like Germany and Italy, with the lowest fertility, also have the lowest female participation rates. This paper analyses the extent to which this can be explained by public policy, in particular taxation and the system of child support. The results suggest that countries which have individual rather than joint taxation, and which support families through child care facilities rather than child payments, are likely to have both higher female labour supply and higher fertility.

Family policies and single parent poverty in 18 OECD countries, 1978–2008

“…Family allowances, on the other hand, were regarded a 'disincentive' for women's employment (Apps & Rees, 2004;Schwarz, 2012;Thévenon, 2011;Thévenon & Luci, 2012) and indeed found to suppress the labor force participation of mothers (Jaumotte, 2003;Nieuwenhuis, 2012Nieuwenhuis, , 2014. Thus, reconciliation policies are in line with this goal of the social investment state, whereas family support policies are not.…”

Gender, Time Use, and Public Policy over the Life Cycle

“…However, when bought-in child care is also an input and can substitute for parental time, as in Apps and Rees (2004), the TFR and FLP can vary positively with each other under quite plausible assumptions. In particular, we show that policies that reduce the price of bought-in quality child care and raise the female net wage can lead to an increase in both fertility and female labour supply.…”

Endogenous fertility, endogenous lifetime and economic growth: the role of child policies

“…However, even the opposite problem of excessive population growth may represent a serious concern for economic growth and sustainable development in some countries in the world. In these countries, therefore, a child-tax 2 policy may be implemented with anti-natalist purposes to alleviate possible 2 We note that while child support programmes have been extensively examined in economic literature (see, e.g., Momota, 2000;van Groezen et al, 2003;Apps and Rees, 2004;van Groezen and Meijdam, 2008), the theoretical analysis of the effects of child taxes on long-run demo-economic performances is, to the best of our knowledge, relatively scarce. For instance, in the literature with endogenous fertility, Bental (1989) represents one of the first environmental problems and social conflicts that an excessive population may cause.…”